Postcard from Croatia

When the freshly elected Croatian government led by Prime Minister Zoran Milanovic banned the state use of PR agencies in 2012, it ignited tensions within the country's tight-knit industry that smoulder on to this day.

In the name of cutting public spending – and in what most of Croatia’s PR practitioners see as a sop to populism – public sector bodies were banned from using external help for their comms. It is a ruling that remains in place despite concerted efforts to overturn the ban.

The move is "irrational and illogical", according to Aleksandra Kolaric, president of the country’s industry body Hrvatska udruga za odnose s javnošcu (HUOJ), which saw an appeal to the EU courts against the decision rejected in November.

"It’s not something I’ve heard of anywhere else in the world," she says, adding that the most detrimental effect has been on the reputation of PR in the country rather than agency profits.

Even if it is shunned by its own government, the largely inward-looking market has soldiered on.

With a slightly less formal business culture than some of its European contemporaries, the industry is mainly focused around the capital Zagreb and dominated by a dozen or so local agencies. The few global players in the market have tended to opt for a domestic partner to secure a presence.

Tourism plays a key role in the economy, with the tourist board working alongside Rooster PR to bring visitors inland and beyond Croatia’s well-established coastal hotspots, while finance and telecoms are also seen as crucial for development.

The importance of the FMCG sector to PR, meanwhile, is reflected in a strong investment from multi-national brands like Coca-Cola and Nivea.

Newspapers remain crucial despite growing use of social media, with Styria Media Group and Europapress Holding the key newspaper groups.

Although efforts around digital are improving and CSR is identified as one area of growth, strong PR influence on in-house strategy is more of an ambition than reality.

And though a series of high profile trials has seen a big cut in corruption across the country, with former president Ivo Sanader imprisoned in 2012 for taking bribes, despite the PR ban political contacts remain key.

"The government is very important in securing work," says Marina Culic Fischer, whose agency Dialog Komunikacije is partnered with Ketchum.

"The strongest PR agencies build their growth on political connections and their revenues clearly grow or fall depending on the party they are linked to."

Despite the homegrown nature of its PR, Croatia’s wider place within the global industry should not be underestimated.

The country’s entry to the EU last year and subsequent access to its steady flow of PR tenders is viewed as a crucial driver behind a longer-term maturing of the market.

Fischer claims recent times have seen an increase in co-operation between Croatia’s PR industry and that of neighbouring countries such as Serbia, Bosnia and Herzegovina and Slovenia.

And as Grayling’s regional manager for south east Europe Natasa Trslic Stambak points out, although big agencies need to be flexible with their pricing, Croatia offers a strong base from which to operate more widely.

"Foreign agencies can’t just look at a single market approach and international clients will often have joint budgets across the Balkans," she says. "Croatia is economically the strongest and most stable market in the region."